What is MRR?

MRR, or Monthly Recurring Revenue, is the predictable revenue your business can rely on every month from subscriptions or other recurring contracts. For B2B and e commerce companies, MRR is the core metric that shows the stability and growth of your revenue engine.

In practice, MRR adds up all recurring payments from active customers, normalised to a monthly amount. This means it ignores one off setup fees, one time service projects, and irregular add ons, and focuses only on the revenue that repeats every month. For SaaS, retainers, and membership models, MRR is often the main indicator of financial health.

How to calculate MRR

To calculate MRR, you multiply the number of active customers by the average monthly revenue per account. A simple formula looks like this: MRR = number of customers × average revenue per account (ARPA). If 50 customers pay you 200 euro per month on average, your MRR is 10,000 euro.

MRR becomes more powerful when you break it down into components such as New MRR, Expansion MRR from upsells, and Churned MRR from cancelled contracts. This “MRR movement” helps you see if your growth comes from new acquisition, better pricing, or improved retention. For a deeper dive into formulas around MRR and related SaaS indicators, you can use our guide on how to calculate B2B SaaS metrics.

Why MRR matters for growth teams

MRR gives founders, CMOs, and marketing managers a clean, comparable way to track revenue over time. Because it removes one off spikes, it is ideal for forecasting, setting targets, and deciding how aggressively to invest in channels like SEO, paid media, and marketing automation.

For example, if your MRR is growing consistently and churn stays low, you can justify scaling performance campaigns or upgrading your site and funnel. If MRR stalls, it is a signal to review acquisition, pricing, onboarding, and product market fit before pushing more budget into traffic.

Key types and use cases of MRR

  • New MRR Revenue from brand new customers that started paying in a given month.
  • Expansion MRR Extra monthly revenue from existing customers, for example through upgrades, add ons, or price increases.
  • Contraction MRR Lost monthly revenue from downgrades or discounts.
  • Churned MRR MRR that disappears completely when customers cancel.
  • Net new MRR The total change in MRR after adding new, expansion, contraction, and churned MRR together.

Together, these types of MRR show where your growth really comes from and where it is leaking. They let you ask better questions, such as whether you should focus your next sprint on acquisition, upsell, or retention.

MRR in digital marketing and decision making

For data driven teams, MRR connects marketing performance to business outcomes. Instead of stopping at leads or clicks, you can track how campaigns contribute to New MRR and Net new MRR over time. This helps you prioritise channels and experiments that build predictable revenue, not vanity metrics.

When you work with an embedded marketing team like 6th Man, MRR becomes a shared scoreboard for SEO, paid media, automation, and conversion optimisation efforts. It keeps everyone aligned on one question are we growing high quality recurring revenue that makes the business stronger month after month.